What is the difference between value for tax purposes and market value?

Value for tax purposes (also known as assessed value) is the value of a property that the government uses to calculate the amount of tax that the property owner is required to pay. This value is usually determined by the local government tax assessor, who looks at the size, amenities, and features of the property in order to come up with a fair and accurate value. Market value, on the other hand, is the estimated price that a buyer is willing to pay for a particular property on the open market. This value is calculated based on recent sales of comparable properties in the area, and can fluctuate depending on the current real estate market. In some cases, the market value of a property can be significantly higher than its tax assessment value. The difference between value for tax purposes and market value can be especially important when it comes to eminent domain law in Washington. When the government exercises its power of eminent domain to take private property for public use, it is generally required to pay the owner the "just compensation" for the property, which is typically equivalent to the market value of the property. In other words, the government must compensate the owner based on the estimated purchase price that a buyer would pay for the property on the open market, rather than the value used to calculate taxes.

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What is the difference between value for tax purposes and market value?

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